Bill Text: NJ S3743 | 2018-2019 | Regular Session | Introduced


Bill Title: Requires boards of education to provide certain levels of health care coverage; limits contributions by employees and retirees of such boards for health care benefits.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2019-05-16 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S3743 Detail]

Download: New_Jersey-2018-S3743-Introduced.html

SENATE, No. 3743

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED MAY 16, 2019

 


 

Sponsored by:

Senator  VIN GOPAL

District 11 (Monmouth)

 

 

 

 

SYNOPSIS

     Requires boards of education to provide certain levels of health care coverage; limits contributions by employees of such boards for health care benefits.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning health care benefits for employees of boards of education and amending various parts of the statutory law.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    Section 2 of P.L.1979, c.391 (C.18A:16-13) is amended to read as follows:

     2.    Any local board of education may directly or indirectly through a trust fund or otherwise enter into contracts of group life, accidental death and dismemberment, hospitalization, medical, surgical, major medical expense, minimum premium insurance policy or health and accident insurance with any insurance company or companies authorized to do business in this State, or may contract with a nonprofit hospital service, medical service or health service corporation with respect to the benefits which they are authorized to provide respectively.  Such contract or contracts shall provide any one or more of such coverages for the employees of the local board of education and may include their dependents.  A local board of education may enter into a contract or contracts to provide drug prescription and other health care benefits, or enter into a contract or contracts to provide drug prescription and other health care benefits as may be required to implement a duly executed collective negotiations agreement, or as may be required to implement a determination by a local board of education to provide such benefit or benefits to employees not included in collective negotiations units. Nothing herein contained shall be deemed to authorize coverage of dependents of an employee under a group life insurance policy or to allow the issuance of a group life insurance policy under which the entire premium is to be derived from funds contributed by the insured employee.

     For purposes of this section, "minimum premium insurance policy" means a group insurance policy issued by an insurer licensed to do business in this State under which the policyholder agrees to directly fund specified claims of insureds covered under the policy, in lieu of payment of a portion of the premium.

     Beginning with contracts for health care benefits entered into after the effective date of P.L.     , c.        (pending before the Legislature as this bill), a board of education that provides health care benefits coverage for its employees pursuant to this section shall provide to employees the option to select one of at least four levels of coverage each for individual, individual and other adult, individual and children, and family, or equivalent categories, for each plan offered by the board differentiated by out of pocket costs to employees including co-payments and deductibles.

This requirement for the selection of options shall apply when the health care benefits are provided through self-insurance, the purchase of commercial insurance or reinsurance, an insurance fund or joint insurance fund, or in any other manner, or any combination thereof

(cf: P.L.1995, c.74, s.4)

 

     2.    Section 36 of P.L.2007, c.103 (C.52:14-17.46.6) is amended to read a follows:

     36.  a.   Notwithstanding the provisions of any other law to the contrary, the commission shall not enter into a contract under the School Employees' Health Benefits Program Act, sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11), for the benefits provided pursuant to the act, unless the level of benefits provided under the contract entered into is equal to or exceeds the level of benefits provided in this section, or as modified pursuant to section 40 of that act (C.52:14-17.46.10). Only benefits for medically necessary services that are not deemed experimental, investigative or otherwise not eligible medical services shall be provided. The determination that services are not "eligible medical services" shall be made by the commission consistent with the best interests of the State, participating employers and those persons covered hereunder. Benefits for services provided pursuant to the School Employees' Health Benefits Act shall be subject to limits or exclusions consistent with those that apply to benefits provided pursuant to the New Jersey State Health Benefits Program Act. The services provided pursuant to this section shall include all services, subject to applicable limits and exclusions, provided through the State Health Benefits Program as of July 1, 2007. The list of services in subsection b. of this section is not intended to be exclusive or to require that any limits or exclusions be exceeded.

      b.   The services covered hereunder by the School Employees' Health Benefits Program shall include:

     (1)   Physician services, including:

     (a)   Inpatient services, including:

     (i)    medical care including consultations;

     (ii)   surgical services and services related thereto; and

     (iii)   obstetrical services including normal delivery, cesarean section, and abortion.

     (b)    Outpatient/out-of-hospital services, including:

     (i)     office visits for covered services and care;

     (ii)    allergy testing and related diagnostic/therapy services;

     (iii)   dialysis center care;

     (iv)   maternity care;

     (v)    well child care;

     (vi)   child immunizations/lead screening;

     (vii) routine adult physicals including pap, mammography, and prostate examinations; and

     (viii) annual routine obstetrical/gynecological exam.

     (2)    Hospital services, both inpatient and outpatient, including:

     (a)     room and board;

     (b)    intensive care and other required levels of care;

     (c)     semi-private room;

     (d)    therapy and diagnostic services;

     (e)     surgical services or facilities and treatment related thereto;

     (f)     nursing care;

     (g)    necessary supplies, medicines, and equipment for care; and

     (h)    maternity care and related services.

     (3)    Other facility and services, including:

     (a)     approved treatment centers for medical emergency/accidental injury;

     (b)    approved surgical center;

     (c)     hospice;

     (d)    chemotherapy;

     (e)     diagnostic x-ray and lab tests;

     (f)     ambulance;

     (g)    durable medical equipment;

     (h)    prosthetic devices;

     (i)     foot orthotics;

     (j)     diabetic supplies and education; and

     (k)    oxygen and oxygen administration.

      c.     Benefits under the contract or contracts purchased as authorized by the School Employees' Health Benefits Program Act shall include those for the treatment of alcoholism where such treatment is prescribed by a physician and shall also include treatment while confined in or as an outpatient of a licensed hospital or residential treatment program which meets minimum standards of care equivalent to those prescribed by the Joint Commission on Hospital Accreditation. No benefits shall be provided beyond those stipulated in the contracts held by the School Employees' Health Benefits Commission.

      d.   Benefits under the contract or contracts purchased as authorized by the School Employees' Health Benefits Program Act shall include those for mental health services subject to limits and exclusions consistent with those that apply to benefits for such services pursuant to the New Jersey State Health Benefits Program Act. Coverage for biologically-based mental illness, as defined in section 1 of P.L.1999, c.441 (C.52:14-17.29d), shall be provided in accordance with section 2 of P.L.1999, c.441 (C.52:14-17.29e).

      e.    Coverage provided under the School Employees' Health Benefits Program Act shall include coverage for all services for which coverage is mandated in the State Health Benefits Program pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.).

     f.     (1)     As used in this subsection:

     (a)   "brand name" means the proprietary or trade name assigned to a drug product by the manufacturer or distributor of the drug product.

     (b)   "carrier" means an insurance company, hospital, medical, or health service corporation, preferred provider organization, or health maintenance organization under agreement or contract with the commission to administer the School Employee Prescription Drug Plan.

     (c)   "School Employee Prescription Drug Plan" means the plan for providing payment for eligible prescription drug expenses of members of the School Employees' Health Benefits Program and their eligible dependents.

     (d)   "generic drug products" means prescription drug products and insulin approved and designated by the United States Food and Drug Administration as therapeutic equivalents for reference listed drug products. The term includes drug products listed in the New Jersey Generic Formulary by the Drug Utilization Review Council pursuant to P.L.1977, c.240 (C.24:6E-1 et al.).

     (e)   "mail-order pharmacy" means the mail order program available through the carrier.

     (f)   "preferred brands" means brand name prescription drug products and insulin determined by the carrier to be a more cost effective alternative for prescription drug products and insulin with comparable therapeutic efficacy within a therapeutic class, as defined or recognized in the United States Pharmacopeia or the American Hospital Formulary Service Drug Information, or by the American Society of Health Systems Pharmacists. A drug product for which there is no other therapeutically equivalent drug product shall be a preferred brand. Determinations of preferred brands by the carrier shall be subject to review and modification by the commission.

     (g)   "retail pharmacy" means a pharmacy, drug store or other retail establishment in this State at which prescription drugs are dispensed by a registered pharmacist under the laws of this State, or a pharmacy, drug store or other retail establishment in another state at which prescription drug products are dispensed by a registered pharmacist under the laws of that state if expenses for prescription drug products dispensed at the pharmacy, drug store, or other retail establishment are eligible for payment under the School Employee Prescription Drug Plan.

     (h)   "other brands" means prescription drug products which are not preferred brands or generic drug products. A new drug product approved by the United States Food and Drug Administration which is not a generic drug product shall be included in this category until the carrier makes a determination concerning inclusion of the drug product in the list of preferred brands.

     (2)   (a)     Employers that participate in the School Employees' Health Benefits Program may offer to their employees and eligible dependents:

     (i)    enrollment in the School Employee Prescription Drug Plan, or

     (ii)   enrollment in another free-standing prescription drug plan, or

     (iii)  election of prescription drug coverage under their health care coverage through the School Employees' Health Benefits Program plan or as otherwise determined by the commission.

     (b)   A co-payment shall be required for each prescription drug expense if the employer chooses to participate in the School Employee Prescription Drug Plan. The initial amounts of the co-payments shall be the same as those in effect on July 1, 2007 for the employee prescription drug plan offered through the State Health Benefits Program.

     (c)   If the employer elects to offer a free-standing prescription drug plan, the employee's share of the cost for this prescription drug plan may be determined by means of a binding collective negotiations agreement, including any agreements in force at the time the employer commences participation in the School Employees' Health Benefits Program.

     (d)   If an employee declines the employer's offering of a free-standing prescription drug plan, no reimbursement for prescription drugs shall be provided under the health care coverage through the School Employees' Health Benefits Program plan in which the employee is enrolled.

     (e)   Prescription drug classifications that are not eligible for coverage under the employer's prescription drug plan shall also not be eligible for coverage under the health care coverage through the School Employees' Health Benefits Program plan except as federally or State mandated.

     (f)   If the employer elects to not offer a free-standing prescription drug plan, then the employer shall offer prescription drug coverage under the health care coverage through the School Employees' Health Benefits Program plan or as determined by the commission. Any plan that has in-network and out-of-network coverage shall cover prescription drugs at 90% in-network and at the out-of-network rate applicable to health care coverage in the plan. The out-of-pocket amounts paid towards prescription drugs shall be combined with out-of-pocket medical payments to reach all out-of-pocket maximums.

     (g)   Health care coverages through the School Employees' Health Benefits Program that only have in-network benefits shall include a prescription card with co-payment amounts the same as those in effect on July 1, 2007 for such coverages offered through the State Health Benefits Program.

     (h)   In the fifth year following the initial appointment of all of its members, the commission shall, as part of the fifth year audit and review undertaken pursuant to section 40 of that act (C.52:14-17.46.10), review the prescription drug program established in this subsection and may make changes in the program pursuant to the terms of section 40 by majority vote of the full authorized membership of the commission.

      g.   Beginning January 1, 2012, the School Employees' Health Benefits Plan Design Committee shall provide to employees the option to select one of at least three levels of coverage each for family, individual, individual and spouse, and individual and dependent, or equivalent categories, for each plan offered by the program differentiated by out of pocket costs to employees including co-payments and deductibles.  Beginning with contracts entered into after the effective date of P.L.     , c.        (pending before the Legislature as this bill), the School Employees' Health Benefits Plan Design Committee shall provide to employees and retirees the option to select one of at least four levels of coverage each for individual, individual and other adult, individual and children, and family, or equivalent categories, for each plan offered by the program differentiated by out of pocket costs to employees and retirees including co-payments and deductibles.

     Notwithstanding any other provision of law to the contrary, the committee shall have the sole discretion to set the amounts for maximums, co-pays, deductibles, and other such participant costs for all plans in the program.  The committee shall also provide for a high deductible health plan that conforms with Internal Revenue Code Section 223.

     There shall be appropriated annually for each State fiscal year, through the annual appropriations act, such amounts as shall be necessary as funding by the State with regard to retirees who have enrolled in a high deductible health plan that conforms with Internal Revenue Code Section 223.

(cf: P.L.2011, c.78, s.48)

 

     3.    Section 6 of P.L.1979, c.391 (C.18A:16-17) is amended to read as follows:

     6.    a.   Any local board of education entering into a contract pursuant to this act is authorized to pay part or all of the premiums or charges for such contracts and may appropriate out of its general funds any money necessary to pay such premiums or charges or portions thereof.

     The contribution required of any employee toward the cost of such coverage may be deducted from the pay, salary or other compensation of such employee upon authorization in writing made to the local board of education.

     The local board of education may reimburse an active employee for his premium charges under Part B of the Federal Medicare Program covering the employee alone.

     Nothing herein shall be construed as compelling a local board of education to pay any portion of the premiums or charges attributable to such contracts.

     b.    Commencing on the effective date of P.L.2010, c.2 and upon the expiration of any applicable binding collective negotiations agreement in force on that effective date, employees of a local board of education shall pay 1.5 percent of base salary, through the withholding of the contribution from the pay, salary or other compensation, for health care benefits coverage provided pursuant to P.L.1979, c.391 (C.18A:16-12 et seq.), notwithstanding any other amount that may be required additionally pursuant to subsection a. of this section for such coverage. 

     Commencing on the effective date of P.L.     , c.    (pending before the Legislature as this bill) and upon the expiration of any applicable binding collective negotiations agreement in force on that effective date, employees of a local board of education shall pay for family coverage, individual coverage, member with child or spouse coverage, or their equivalents no more than the amount specified as follows, through the withholding of the contribution from the pay, salary or other compensation, for health care benefits coverage provided pursuant to P.L.1979, c.391 (C.18A:16-12 et seq.), as that amount of contribution is specified by an applicable resolution, collective negotiations agreement, or other means: 

 

Individual Coverage or Its Equivalent

employees who earn less than $50,000 shall pay no more than $1,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $2,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $3,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $4,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $5,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $6,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $7,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $8,000 of their base salary.

 

Family Coverage or Its Equivalent

employees who earn less than $50,000 shall pay no more than $3,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $4,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $5,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $6,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $7,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $8,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $9,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $10,000 of their base salary.

 

Member with Spouse or Child Coverage, or Its Equivalent

employees who earn less than $50,000 shall pay no more than $2,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $3,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $4,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $5,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $6,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $7,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $8,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $9,000 of their base salary.

 

     This paragraph shall apply notwithstanding the provisions of section 78 of P.L.2011, c.78 (C.18A:16-17.2) to the extent that it requires the inclusion of contribution levels in collective negotiations agreements after full implementation of the requirements of the law specified in that section 78, and notwithstanding the requirement of any other law or regulation to the contrary.

     The amount of contribution to be paid by an employee for health care benefits coverage provided under this section shall be determined by means of a binding collective negotiations agreement.  With respect to employees for whom there is no majority representative for collective negotiations purposes, the amount of contribution may be an amount that is consistent with the terms of any collective negotiations agreement binding on the employer, as applied at the sole discretion of the employer.

     If an employee receives a retroactive salary increase, the amount of that retroactive increase shall not be included in the annual base salary used to calculate the contribution or to identify the percentage or amount of contribution.  If an employee is laid off for reasons of economy or efficiency, the employer shall reimburse to the employee the annual contribution made by that employee for health care benefits coverage during the 12 months prior to the date of termination of employment.

     This subsection shall apply also when the health care benefits coverage is provided through an insurance fund or joint insurance fund or in any other manner.

(cf: P.L.2010, c.2, s.13)

 

     4.    Section 39 of P.L.2007, c.103 (C.52:14-17.46.9) is amended to read as follows:

     39.  a.   For each active covered employee and for the eligible dependents the employee may have enrolled at the employee's option, from funds appropriated therefor, the employer shall pay to the commission the premium or periodic charges for the benefits provided under the contract in amounts equal to the premium or periodic charges for the benefits provided under such a contract covering the employee and the employee's enrolled dependents.

     b.    The obligations of any employer to pay the premium or periodic charges for health benefits coverage provided under the School Employees' Health Benefits Program Act, sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11), may be determined by means of a binding collective negotiations agreement, including any agreement in force at the time the employer commences participation in the School Employees' Health Benefits Program. With respect to employees for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective payment obligations set forth in law for the employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the employer.

     Commencing on the effective date of P.L.2010, c.2 and upon the expiration of any applicable binding collective negotiations agreement in force on that effective date, employees shall pay 1.5 percent of base salary, through the withholding of the contribution, for health benefits coverage provided under P.L.2007, c.103 (C.52:14-17.46.1 et seq.), notwithstanding any other amount that may be required additionally pursuant to this subsection by means of a binding collective negotiations agreement or the modification of payment obligations.

     Commencing on the effective date of P.L.     , c.    (pending before the Legislature as this bill) and upon the expiration of any applicable binding collective negotiations agreement in force on that effective date, employees shall pay for family coverage, individual coverage, member with child or spouse coverage, or their equivalents  no more than the amount specified as follows, through the withholding of the contribution from the pay, salary or other compensation, for health care benefits coverage provided pursuant to P.L.2007, c.103 (C.52:14-17.46.1 et seq.), as that contribution may be required by an applicable resolution, collective negotiations agreement, or other means:

 

Individual Coverage or Its Equivalent

employees who earn less than $50,000 shall pay no more than $1,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $2,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $3,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $4,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $5,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $6,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $7,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $8,000 of their base salary.

 

Family Coverage or Its Equivalent

employees who earn less than $50,000 shall pay no more than $3,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $4,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $5,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $6,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $7,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $8,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $9,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $10,000 of their base salary.

 

Member with Spouse or Child Coverage, or Its Equivalent

employees who earn less than $50,000 shall pay no more than $2,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $3,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $4,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $5,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $6,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $7,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $8,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $9,000 of their base salary.

This paragraph shall apply notwithstanding the provisions of section 77 of P.L.2011, c.78 (C.52:14-17.28e) to the extent that it requires the inclusion of contribution levels in collective negotiations agreements after full implementation of the requirements of the law specified in that section 77, and notwithstanding the requirement of any other law or regulation to the contrary.

     The amount of contribution to be paid by an employee for health care benefits coverage provided under this section shall be determined by means of a binding collective negotiations agreement.  With respect to employees for whom there is no majority representative for collective negotiations purposes, the amount of contribution may be an amount that is consistent with the terms of any collective negotiations agreement binding on the employer, as applied at the sole discretion of the employer.

     If an employee receives a retroactive salary increase, the amount of that retroactive increase shall not be included in the annual base salary used to calculate the contribution or to identify the percentage or amount of contribution.  If an employee is laid off for reasons of economy or efficiency, the employer shall reimburse to the employee the annual contribution made by that employee for health care benefits coverage during the 12 months prior to the date of termination of employment.

     c.     There is hereby established a School Employee Health Benefits Program fund consisting of all contributions to premiums and periodic charges remitted to the State treasury by participating employers for employee coverage. All such contributions shall be deposited in the fund and the fund shall be used to pay the portion of the premium and periodic charges attributable to employee and dependent coverage.

     d.    Notwithstanding any law to the contrary and except as provided by amendment by P.L.2010, c.2, and by P.L.2011, c.78, the payment in full of premium or periodic charges for eligible retirees and their dependents pursuant to section 3 of P.L.1987, c.384 (C.52:14-17.32f), section 2 of P.L.1992, c.126 (C.52:14-17.32f1), or section 1 of P.L.1995, c.357 (C.52:14-17.32f2) shall be continued without alteration or interruption and there shall be no premium sharing or periodic charges for certain school employees in retirement once they have met the criteria for vesting for pension benefits, which criteria for purposes of this subsection only shall mean the criteria for vesting in the Teachers' Pension and Annuity Fund. For purposes of this subsection, "premium sharing or periodic charges" shall mean payments by eligible retirees based upon a proportion of the premiums for health care benefits.

(cf: P.L.2011, c.78, s.54)

 

     5.    Section 3 of P.L.1987, c.384 (C.52:14-17.32f) is amended to read as follows:

     3.    A qualified retiree from the Teachers' Pension and Annuity Fund (N.J.S.18A:66-1 et seq.) and dependents of a qualified retiree, but not including survivors, are eligible to participate in the State Health Benefits Program until June 30, 2008, and beginning July 1, 2008, in the School Employees' Health Benefits Program, regardless of whether the retiree's employer participated in the program.

     A qualified retiree is a retiree who:

     a.     Retired on a benefit based on 25 or more years of service credit;

     b.    Retired on a disability pension based on fewer years of service credit; or

     c.     Elected deferred retirement based on 25 or more years of service credit and who receives a retirement allowance.

     The program shall reimburse a qualified retiree who participates in the program for the premium charges under Part B of the federal Medicare program for the retiree and the retiree's spouse. A qualified retiree who retired under subsections a. and b. of this section prior to the effective date of this 1987 amendatory and supplementary act is eligible for the coverage if the retiree applies to the program for it within one year after the effective date, and a qualified retiree as defined under subsection c. of this section whose retirement allowance commenced prior to the effective date of this 1992 amendatory act is eligible for the coverage if the retiree applies to the program for it within one year after the effective date.

     The premium or periodic charges for benefits provided to a qualified retiree and the dependents of the retiree, and the cost for reimbursement of Medicare premiums shall be paid by the State.  An employee who becomes a member of the Teachers' Pension and Annuity Fund on or after the effective date of P.L.2010, c.2 shall pay as a qualified retiree 1.5 percent of the retiree's monthly retirement allowance, including any future cost-of-living adjustments, through the withholding of the contribution, for health

benefits coverage provided under P.L.2007, c.103 (C.52:14-17.46.1 et seq.) and the State shall pay the remainder of the premium or periodic charges for benefits provided to a qualified retiree and the dependents of the retiree, and the cost for reimbursement of Medicare premiums.

     A qualified retiree shall contribute toward the cost of health care benefits in retirement an amount that is 50 percent of the amount of maximum contribution specified in section 39 of P.L.2007, c.103 (C.52:14-17.46.9), with the retirement allowance and any future cost of living adjustment thereto used to identify the amount of contribution.  This paragraph shall apply notwithstanding the provisions of section 77 of P.L.2011, c.78 (C.52:14-17.28e) to the extent that it requires a public employee to contribute in retirement toward the cost of health care benefits coverage and section 77 shall no longer be applicable.  This paragraph shall apply to section 2 of P.L.1992, c.126 (C.52:14-17.32f1) and section 1 of P.L.1995, c.357 (C.52:14-17.32f2). The provisions of this paragraph shall apply to qualified retirees who retire on or after the effective date of P.L.   , c.     (pending before the Legislature as this bill.

(cf: P.L.2010, c.2, s.2)

 

     6.    This act shall take effect on the first day of the fourth month following enactment.

 

 

STATEMENT

 

     This bill requires the School Employees Health Benefits Program (SEHBP) and local boards of education to provide to employees of such boards the option to select one of at least four levels of coverage each for individual, individual and other adult, individual and children, and family, or equivalent categories, for each health care plan offered, differentiated by out of pocket costs to employees including co-payments and deductibles.

     In addition, the bill imposes a maximum contribution that may be required annually of the employees of local board of education toward the cost of the health care benefits coverage provided by the board.  The limits would be as follows:

 

Individual Coverage or Its Equivalent

employees who earn less than $50,000 shall pay no more than $1,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $2,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $3,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $4,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $5,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $6,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $7,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $8,000 of their base salary.

 

Family Coverage or Its Equivalent

employees who earn less than $50,000 shall pay no more than $3,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $4,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $5,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $6,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $7,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $8,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $9,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $10,000 of their base salary.

 

Member with Spouse or Child Coverage, or Its Equivalent

employees who earn less than $50,000 shall pay no more than $2,000 of their base salary;

employees who earn $50,000 or more but less than $65,000 shall pay no more than $3,000 of their base salary;

employees who earn $65,000 or more but less than $80,000 shall pay no more than $4,000 of their base salary;

employees who earn $80,000 or more but less than $95,000 shall pay no more than $5,000 of their base salary;

employees who earn $95,000 or more but less than $110,000 shall pay no more than $6,000 of their base salary;

employees who earn $110,000 or more but less than $125,000 shall pay no more than $7,000 of their base salary;

employees who earn $125,000 or more but less than $140,000 shall pay no more than $8,000 of their base salary; or

employees who earn $140,000 or more shall pay no more than $9,000 of their base salary.

     The bill clarifies that the amount of contribution to be paid by an employee for health care benefits coverage will be determined by means of a binding collective negotiations agreement.  With respect to employees for whom there is no majority representative for collective negotiations purposes, the amount of contribution may be the same amount that is consistent with the terms of any collective negotiations agreement binding on the employer, as applied at the sole discretion of the employer.

     The bill provides that, if an employee receives a retroactive salary increase, the amount of that retroactive increase would not be included in the annual base salary used to calculate the contribution or to identify the percentage or amount of contribution.  Also, if an employee is laid off for reasons of economy or efficiency, the employer must reimburse to the employee the contribution made by that employee for health care benefits coverage during the 12 months prior to the date of termination of employment.

     Finally, the bill requires a qualified retiree of a local board of education to contribute toward the cost of health care benefits in retirement in an amount that is 50 percent of the amount of maximum contribution specified above.  Certain employees of local boards of education are already required by P.L.2011, c.78 to contribute a percentage of the premium for health care benefits coverage in retirement based on the percentage set forth in P.L.2011, c.78.

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